1.3 Organisational Objectives Flashcards
(24 cards)
Define a vision statement
An inspiring long-term declaration of what an organisation aspires to become in the future.
Expresses strategic direction and purpose.
Example: “To be the global leader in sustainable energy.”
Define a mission statement
- Declaration of the purpose of an organisation
- Includes statement of the organisation, function & objectives
- Where organisation formally sets out + publicises its cor objectives
Example: “To empower people through affordable and clean energy solutions.”
Evaluate having a mission statement
✅ clear purpose = clear picture to its stakeholders
✅ motivate employees & investors
❌ often vague and meaningless
❌ require time + resources to be effective
❌ impossible to disagree with, often ignored / not taken seriously
❌ some businesses mission statement doesn’t align w/ their activities —> created to look good to stakeholders
State 3 criticism for vision and mission statements
- Can be too vague or unrealistic.
- Often serve public relations purposes rather than guiding action.
- Difficult to measure or hold accountable.
State differences between a vision and mission statement
Timeline / scope / purpose / consistency & change
VISION
longer-term aspiration
Abstract
Guides company’s strategic direction (ensures all decisions align w/ future goal)
Long-term and enduring
MISION
Nearer-term goal
More specific
Shapes day-to-day operations & short-term objectives
Adjustments to mission statement from time-to-time
Define AIMS
- Broad + long-term goals that guide the overall direction & purpose of a business
- Often qualitative & not time-bound or measurable, & help align strategic decision-making across the organisation
Define business objectives
- Clearly defined & measurable targets used to help achieve an organisation’s overall goals.
- Provide direction & motivation
What are smart objectives ?
Specific, Measurable, Achievable, Relevant, Time-specific.
Compare aims and objectives
(Timeframe, measurability, purpose, leveller of detail
Aims
Long-term or indefinite
Not easily measurable – qualitative and open-ended
Provide overall vision and strategic direction
General and abstract
Objectives
Clearly defined timeframe (usually short- to medium-term)
Measurable – based on specific criteria like quantity or deadlines
Help guide planning, decision-making, and track progress
Detailed and actionable
What are the 2 types of objectives?
Strategic objectives (long-term)
Tactical objectives (short-term)
Define strategical objectives
- Long-term, high-level goals set by senior management, guide overall direction of all the business
- Require large investments and align with vision.
Define tactical objectives
- Short-to-medium term goals set by middle managers that support the achievement of strategic objectives
- Specific + measurable + specific to functional areas to help coordinate day-to-day operations
Compare and contrast tactical and strategical objectives
Timeframe, set by, purpose, focus, scope
Strategic Objectives
Long-term (typically 3–5+ years)
Senior management / Board of directors
Guide the overall direction of the business
Broad goals (e.g. growth, profitability, market leadership)
Organisation-wide
Tactical Objectives
Short- to medium-term (up to 1–2 years)
Middle management
Implement strategies and support day-to-day operations
Specific goals (e.g. increase sales by 10% in 6 months)
Departmental or functional
What are common business objectives:
Growth
Profit
Protecting shareholder value
Ethical
Market share
Explain business objective : growth
- The expansion of a business measured by indicators like revenue, customer base, output, or market share.
- Can be achieved through strategies like market development, product diversification, or increased production.
State 3 benefits of business objective growth
✅ Higher profits and sales revenue.
✅ Economies of scale.
✅ Stronger brand power.
Define business objective : profit + state 3 reasons for its importance
The financial surplus after all costs are deducted from revenue.
A primary objective for most private sector businesses.
Importance:
- Reward for entrepreneurship.
- Source of retained earnings.
- Attracts investors.
Explain market share objective
The percentage of total sales in an industry that a business holds.
Indicates competitiveness and brand strength.
Define business objective ‘protecting shareholder value’
The value delivered to shareholders in the form of rising share prices and dividends.
Focuses on increasing profitability and long-term returns to owners of a limited company
Define business ‘ethical objectives’
Moral goals set by a business to influence decisions and operations.
Aim to ensure the firm acts in a socially responsible and ethical manner.
Evaluate having ethical objectives or a CSR
✅ Improved corporate image
✅ attract new customers
✅Improved staff morale and motivation
✅ attract investors (CSR likely ⬆️ company’s value + investors ⬆️ confident investing in a business with ethical standards)
❌ Compliance costs
❌ Lower profits
❌Stakeholder conflicts
❌The subjective nature of business ethics
Define Corporate Social Responsibility
= decision by a business to take responsibility for their activities
- by considering interest + impact on a wide range of stakeholders in society
- business accepts the moral + legal obligation to society, not just to investors, that result from its operations
State 3 features of CSR
- promotes transparency
- Involves careful consideration of the environmental impact of organisations activities
- Ethical decision-making and considering stakeholders’ interests
